Policy Tools
An agricultural subsidy is a governmental subsidy paid to farmers and agribusinesses to manage the agricultural industry as one part of the various methods a government uses in a mixed economy. The conditions for payment and the reasons for the individual specific subsidies varies with farm product, size of farm, nature of ownership, and country among other factors. Enriching peanut farmers for political purposes, keeping the price of a staple low to keep the poor from rebelling, stabilizing the production of a crop to avoid famine years, encouraging diversification and many other purposes have been suggested as the reason for specific subsidies.
Price floors or price ceilings set a minimum or maximum price for a product. Price controls encourage more production by a price floor or less production by a price ceiling. A government can erect trade barriers to limit the quantity of goods imported (in the case of a Quota Share) or enact tariffs to raise the domestic price of imported products. These barriers give preference to domestic producers.
Read more about this topic: Agricultural Policy
Famous quotes containing the words policy and/or tools:
“Will mankind never learn that policy is not morality,—that it never secures any moral right, but considers merely what is expedient? chooses the available candidate,—who is invariably the devil,—and what right have his constituents to be surprised, because the devil does not behave like an angel of light? What is wanted is men, not of policy, but of probity,—who recognize a higher law than the Constitution, or the decision of the majority.”
—Henry David Thoreau (1817–1862)
“Armies, though always the supporters and tools of absolute power for the time being, are always the destroyers of it too; by frequently changing the hands in which they think proper to lodge it.”
—Philip Dormer Stanhope, 4th Earl Chesterfield (1694–1773)